The interest earned figure used to calculate the annual percentage yield earned must be rounded to two decimals and reflect the amount actually paid. For example, if monthly statements are sent for an account that compounds interest daily and credits interest quarterly, the balance for the second monthly statement would include interest that had accrued for the prior month.Ģ. Must be included in the balance for succeeding statements if a statement is issued more frequently than compounded interest is credited on an account. For example, if monthly statements are sent for an account that compounds interest daily and credits interest monthly, the balance may not be increased each day to reflect the effect of daily compounding. May not be included in the balance for statements issued at the same time or less frequently than the account's compounding and crediting frequency. To calculate the annual percentage yield earned, accrued but uncredited interest:
Institutions must treat a negative account balance as zero to determine the balance on which the annual percentage yield earned is calculated. The balance used in the formula for the annual percentage yield earned is the sum of the balances for each day in the period divided by the number of days in the period.Ģ. The interest figure used in the calculation of the annual percentage yield earned may be derived from the daily balance method or the average daily balance method. Annual Percentage Yield Earned for Periodic Statementsġ. The daily interest earned carried to five or more decimal places The daily rate applied to a balance carried to five or more decimal places The following are examples of permissible rounding for calculating interest and the annual percentage yield: Annual Percentage Yield for Account Disclosures and Advertising Purposesġ.
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